Coral Laboratories Ltd. - Potential Multibagger

Stock Opportunities Untested - but worth a good look
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Coral Laboratories Ltd.(524506)-Current MCap-160Cr

Snapshot
Its a 2 decade old company with ultra modern strategically place plants.The company’s registered office is at Ghatkopar, Mumbai and plants are located at Daman, Dehradun and Vasai. The plants are certified with WHO GMP,ISO9001:2008, Aqa International, ANAB Accredited.
The company is in Pharma with around 400 products in below segments
• ANTIBIOTICS / ANTIBACTERIAL (For Day to Day infections to severe infections)
• VITAMIN SUPPLEMENT - For Vitamin Deficiency/during treatment
• PROTEIN SUPPLEMENT (In two delicious flavours)
• IRON SUPPLEMENT (with all essential factors like Protein, Carbohydrate and Minerals)
• ANTACID / ANTIULCER - Fast relief from acidity with prolonged duration of action
• ANTISPASMODIC - Fast relief from Infant Colic, Griping Pain & Flatulence
• ANALGESIC / ANTIPYRETIC - Fast relief from Pain and Fever
• ANALGESIC / ANTIPYRETIC / ANTIINFLAMATORY - Fast relief from Pain, Fever & Inflammation
• ANTIASTHMATIC - Treatment for Asthma and Allergic conditions
• ANTHELMENTIC - to expel all types of worms
• ANTIDIABETIC
• ANTIPROTOZOAL / ANTIAMOEBIC - Treatment for Amoebic Dysentry
• COUGH SUPPRESSANT / EXPECTORANT - suitable cough syrup for all types of cough
• ANTICOLD
• CARDIAC MEDICINES / Special Cardiac Products
• HERBAL MEDICINE - Various Disorders associated with Mensuration
• TOPICAL PREPARATIONS - Antibacterial, Anti-eczematic & Anti-fungal
• APPETIZER
• ORAL ANTISEPTIC PREPARATIONS - Pain Relieving Gel for Gums and Mouth Ulcers
• ANTIMALARIAL DRUGS
• MUSCLE RELAXANTS
• NASALSPRAY
• ANTI ALLERGIC
• ANTI FUNGAL
• CALCIUM PREPARATIONS
• MOUTHWASH
• ANTI EMETIC
• ANTIPSYCHOTIC DRUGS
• INJECTABLES
• EYE DROPS
• EAR DROPS
• EYE / EAR DROPS
• NASAL SPRAY

The company mainly supplies to Non regulated markets.The countries to which Coral exports are Sri Lanka,Myanmar,Cambodia,Vietnam,Jordan,Philippines,Afghanistan,Kenya,Nigeria,Malawi,Chile,Cuba,Barbados,Jamaica,Ivory Coast and Costa Rica.
The company also supplies the goods under tender supply to countries viz, Lesotho,Papua NewGuinea, Malawi and to Hong Kong for hospital supplies.
The company has also got its plant approved from MOH of Ethiopia, Nigeria, Ivory Coast, Malawi etc.

Last few quarters the company is showing a good set of results. The Promoter Holding is around 71.57. 3 Years Sales Growth is 14.14% and TTM Sales Growth is 29.8%. Compounded Profit Growth for last 3 years is 19.2% and TTM Profit growth is 28.98%.

The OPM margins are improving year by year
March 2012-18.97%
March 2013-18.19%
March 2014- 19.84%
March 2015-20.75%
TTM-22.49%
(Note:Above figures picked up from Screener)

Trying to dig more information on the same.Views invited.

Disc: Tracking from last 6-7 months. Invested recently.

4 Likes
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check the cash flows…they have been negative all throughout…

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When checked one finds operating cash flows to be be Positive all throughout. Can you Pl. elaborate on your comment of ‘all throughout negative cash flows’. Am I missing something.
The Net cash flow from Operating Activities for past few years is as under:
2014-15 0.372 Cr.
2013-14 1.026 Cr.
2012-13 0.985 Cr.
2011-12 2.957 Cr.
2010-11 3.489 Cr.
2009-10 3.989 Cr.
Reducing but not -ve.

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I had been tracking Coral around 8 months back.

I had asked about the company & product reviews from my relative, who is a pharma distributor.

He happened to know the owner in person.

The feedback I got was : that there is nothing wrong in the company., it has been growing steadily since last 1 decade. But they lack any exclusivity in their product range. Most of the company’s products are general ( mean to say, also made by many other companies ). There is no product which can command a higher margin or a dominant market share.

The company’s diverse product range & increase in export as well as domestic market share can help improve its topline and bottomline.

Discl : Tracking.

3 Likes
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Sir,
I too have invested at 490 levels but I am a bit skeptical about it because of the recent ban on FDC (fixed drug combination) by the health ministry. above all I read an article in DALAL STREET INVESTMENT JOURNAL recently in a section called SPECIAL REPORT dated 17 april 2016, vol 31 No 9. which states the name of this company (page No 74, column 1), under sub-section BANNED DRUGS & COMPANIES HIT. above all i have seen from screener.in that the company has delivered a poor sales growth rate of 11.82%.
awaiting your reply at the earliest.

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  1. I think, as an investor, one has to study, understand & gauge the impact of banned products on the company’s topline & bottomline.
    It would then present a clear picture of whether the ban has a substantial or minimal effect.
    Pharma being not my forte, I will not be able to study the company’s banned products & its implications.

  2. On the numbers front, I personally feel the company is comfortably positioned in its P/E ratio, vis-a-vis its 5 yr. profit CAGR.
    But more important than the past performance is the future outlook of the company, which makes a really good investment.
    I am in no position to understand / estimate the future growth potential of the company.
    One thing that acts as a cushion is the fact that the company’s OPM are not under pressure & have been marginally increasing in the last decade.

Disclosure : Tracking, Not invested yet.
Also, the views mentioned are my personal & fellow investors need to do their own in-depth study.

1 Like
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Sir,
thank you very much for your inputs.

1 Like
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Any particular reason for reducing net operating cash flow? While PAT is increasing YoY…Net operating cash flow is reducing…also there is sharp increase in trade recievables…(From FY 14 to FY 15)?

Can somebody throw light on this?

Disc: Not Invested.

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This came in one of my screeners… Everything looked positive except very high receivables. These have been increasing every year.
Can someone familiar/tracking this company through some light on this please ?

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Since Coral labs Promoters pledged their shares in September 2017, this stock has come crashing to below 400. But what is baffling me is that there is no news or announcement for which the promoters may have to pledged shares including their previous annual report.

I have seen some building and construction activity at their land near Baroda in person but there is no information mentioned in the annual report or news.

Also, their quarterly results have been showing a consolidated loss since last three quarters, but there is no detail. Not even a note below the results.

Can anybody shed light on this issue of what has changed since September 2017?

DISC: Invested tracking quantity

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Looks good days are ahead for coral as promoters have unpleged shares. Still not sure whether to buy at cmp which is near 52 week low.